## The ECB and Euro-Area Enlargement

_IMF Working Papers, October 1, 2002_

## Source details

**Canonical URL:** [The ECB and Euro-Area Enlargement](https://www.imf.org/en/publications/wp/issues/2016/12/30/the-ecb-and-euro-area-enlargement-16107)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/30/the-ecb-and-euro-area-enlargement-16107/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/30/the-ecb-and-euro-area-enlargement-16107/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/30/the-ecb-and-euro-area-enlargement-16107/bundle-manifest.json)

## Bibliographic details
- Authors: Helge Berger
- Published: October 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451858761.001

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### Summary of findings
- Within less than a decade, the number of member countries in the euro area could more than double.
- The vast majority of accession countries are relatively small in economic terms, compared with current members.
- Absent reforms, such a significant but asymmetric expansion could:
  - Impede the effectiveness of the institutional policymaking process of the European Central Bank (ECB).
  - Be seen by some as resulting in the overrepresentation of small member countries in the ECB Council.
- The paper illustrates these issues, describes principles for reforming the ECB statute, and discusses four specific institutional reform scenarios.
- The analysis coincides with the ECB Council being scheduled to present suggestions for reform by late 2002.

### Principles for ECB statute reform (as described)
- Reforms should address the institutional policymaking process to preserve effectiveness with a much larger membership.
- Reforms should respond to concerns about asymmetric expansion and perceived overrepresentation of small member countries.
- The paper outlines underlying principles on which reforms of the ECB statute could build (principles described in the paper; summary here reflects that the paper "describes the principles").

### Institutional reform scenarios (overview)
- The paper discusses four specific institutional reform scenarios for the ECB.
- The scenarios are presented as concrete options to adapt the ECB decision-making framework to a substantially enlarged euro area.
- Scenarios are considered against the backdrop of:
  - ECB decision-making framework and process.
  - Concerns about representation on the ECB Council.
  - Implications for the ECB’s reaction function and stabilization effort in the presence of structural inflation and supply shocks.

### Policy implications and issues analyzed
- Impact of enlargement on monetary policy decision-making in the euro area.
- Role of business cycle synchronization and differences between accession and current members.
- Potential effects on inflation and the ECB’s ability to stabilize the euro-area economy.
- Relevance for transition countries, Eastern Europe, and accession countries joining the Economic and Monetary Union (EMU).
- Consideration of trade-offs faced by the ECB in dealing with supply shocks and structural inflation in a larger, more heterogeneous membership.

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## Content in this bundle

- **The ECB and Euro-Area Enlargement - WP/02/175**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-ecb-and-euro-area-enlargement-16107_